Departing Goldman Sachs banker slams culture

A Goldman Sachs banker has launched a withering attack on the bank in a newspaper column announcing his resignation, saying that several managing directors at the Wall Street firm had referred to their own clients as “muppets.”

In an opinion column for Wednesday’s New York Times, Greg Smith, who worked in equity derivatives, said Goldman had become “as toxic and destructive as I have ever seen it.”

“It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets”,” Smith said in the newspaper.

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Goldman Sachs issued a short statement in response:

“We disagree with the views expressed, which we don’t think reflect the way we run our business. In our view, we will only be successful if our clients are successful. This fundamental truth lies at the heart of how we conduct ourselves.”

Calls to Smith, who was a vice president in derivatives sales at the firm, were referred to the bank’s press office. According to the British Financial Services Authority‘s register, he joined Goldman Sachs’s UK unit a year ago.

Smith’s letter set off a blizzard of comments on Twitter and other social media. In Britain, “muppet” is used as a derogatory term to describe someone who is regarded as being ignorant.

While many of the commentators expressed surprise about the allegations in the piece, others called for Smith to shed light on why he left the bank, or pointed out that he seemed to have been employed in a comparatively junior role.

Some poked fun at Smith’s description of how he won a bronze medal for table tennis at the Maccabiah Games in Israel, which he says was one of the proudest moments.

“Goldman Sachs today has become too much about shortcuts and not enough about achievement. It just doesn’t feel right to me anymore,” Smith said in the article.

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Smith’s column said the London-based banker had spent 12 years at the bank and was resigning on Wednesday.

Goldman Sachs, fourth among investment banks last year according to fee-income rankings compiled by Thomson Reuters and Freeman Consulting, was once described as “a great vampire squid” in the Rolling Stone music magazine. The reference was to the extensive influence of Goldman in politics and business.

In recent years it has faced a series of high-profile incidents potentially damaging to its image after the near-collapse of the global banking system since the middle of 2007.

One of its bankers, Fabrice Tourre — who referred to himself as “fabulous Fab” in emails — is still embroiled in legal claims in the United States after allegations that he duped buyers of a complex credit instrument.

And two years ago, Chief Executive Lloyd Blankfein caused a media storm when he said that as a banker he was just “doing God’s work”, defending high banker pay and the role their institutions play in the economy.

Earlier this month, Goldman Sachs’s public relations chief Lucas van Praag left after many years in the job, and was replaced by Richard “Jake” Siewert, a veteran of the Clinton and Obama administrations.

Van Praag was known for defending Goldman executives’ actions and their multimillion-dollar pay packages, often telling reporters in public statements that their stories were half-baked or unintelligent.

Siewert’s appointment came as the broader financial industry faces protests from groups like Occupy Wall Street and is under continuous pressure from regulators after the financial crisis.

One comment

What a surprise — the corporate elite think the hoi polloi are sheep to be fleeced (or to follow the muppet analogy — merely puppets for Goldman Sachs executives to shove their hands up their a**es and manipulate).